Last Year, Construction Contract Amount Rebounded to 252 Trillion Won... Public Sector Filled Private Sector's Slump

Up 4.9% Year-on-Year
Public Sector Rises 14% to 77 Trillion KRW
Private Sector Sees Only 1.4% Growth

A construction site in Seoul. Photo by Kang Jin-hyung

The contract amount for construction projects by domestic construction companies, which had sharply declined due to the construction industry downturn, rebounded last year. While the public sector drove the overall performance, the private sector remained virtually stagnant.

According to the Ministry of Land, Infrastructure and Transport on the 30th, the construction contract amount in 2024 was recorded at 252.5 trillion KRW. This is a 4.9% (11.9 trillion KRW) increase compared to the previous year (240.6 trillion KRW). The annual construction contract amount showed a gradual increase from 261.4 trillion KRW in 2020 to 296.8 trillion KRW in 2022.

However, the situation changed drastically in 2023. Due to a combination of factors such as a high interest rate trend, instability in the project financing (PF) market, and liquidity crunch, private sector orders sharply declined, reducing the total contract amount to 240.6 trillion KRW, down 18.9% from the previous year. In particular, the private sector decreased by 26.4%, from 235.3 trillion KRW in 2022 to 173.1 trillion KRW in 2023. The contract amount for building construction also took a direct hit, dropping 27.3% year-on-year to 162.5 trillion KRW in the same year.

Last year, a rebound was achieved mainly in the public sector. The public sector recorded 77 trillion KRW, a 14% increase from the previous year. From the second quarter through the fourth quarter, it showed consecutive double-digit growth rates, boosting the overall performance. The private sector increased slightly by 1.4% to 175.5 trillion KRW.

By construction type, the building sector increased by 5.7% year-on-year to 171.7 trillion KRW, and civil engineering rose by 3.4% to 80.8 trillion KRW. Notably, civil engineering contracts in the third quarter surged by 56.2% compared to the previous year, showing significant quarterly fluctuations.

The construction contract amount in the fourth quarter of last year recorded 75.2 trillion KRW, a 4.4% increase compared to the same period last year. The public sector increased by 22.8% to 27.4 trillion KRW, while the private sector decreased by 3.8% to 47.7 trillion KRW.

By construction type, civil engineering contracts amounted to 18.6 trillion KRW, down 19.1% year-on-year. Building contracts increased by 15.4% to 56.6 trillion KRW. By site location, the metropolitan area recorded 39.9 trillion KRW, up 12.1% year-on-year, while non-metropolitan areas decreased by 3.1% to 35.3 trillion KRW.

Data on construction contract statistics can be accessed from the Ministry of Land, Infrastructure and Transport’s statistics website starting from the 31st.